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TMI BlogFinance Bill, 2016 - Changes in Customs and Central Excise law and rates of dutyX X X X Extracts X X X X X X X X Extracts X X X X ..... 016-Central Excise (N.T.) 1st March, 2016 MISCELLANEOUS Clean Energy Cess No.1 and No. 2/2016-Clean Energy Cess 1st March, 2016 Infrastructure Cess No.1/2016-Infrastructure Cess 1st March, 2016 Unless otherwise stated, all changes in rates of duty take effect from the midnight of 29th February / 1st March, 2016. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 138 (i), 142 (i), 143 (i), 159, 231 and 232 of the Finance Bill, 2016 so that changes proposed therein take effect from the midnight of 29th February / 1st March, 2016. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2016. These dates may be carefully noted. 2. Important changes in respect of Customs and Central Excise duty and legislative changes are contained in the four Annexes appended to this letter: 1) Annex I contains Chapter wise changes relating to Customs; 2) Annex II contains Chapter wise changes relating to Central Excise; 3) Annex III contains the clarifications being issued on certain matters relating to Customs and Central Excise. 4) Annex IV provides a bird‟s eye view of legislative ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT credit) or 12.5% (with CENVAT credit)‟, b. The levy is restricted to such articles which have RSP of ₹ 1000 and above, and c. The tariff value is being revised from 30% of RSP to 60% of the RSP. 3.1.2 In this regard, I would like to reiterate the instructions issued vide Budget letter F.No.334/3/2011-TRU dated 28.02.2011, Instruction D.O. F.No.334/3/2011-TRU, dated 04.03.2011 and Instruction D.O. F.No. B-1/3/2011-TRU, dated 25.03.2011. The said instructions shall apply mutatis mutandis to the new levy. Salient features of these instructions [suitably modified for the proposed optional levy, as underlined] are as under: (i) The levy shall not apply to retail tailoring establishments that stitch garments in a customized manner to the size and style specifications of individual customers, whether out of fabric purchased by the customer from the same establishment or fabric supplied by the customer. (ii) The brand name owner, who gets the goods manufactured on his own account on job work, shall pay the duty leviable on such goods as if the goods were manufactured by him. The brand name owner (and not the job-worker) shall be required to register and comply with all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his purpose shall be done in accordance with the provisions of Para 3A of notification No. 8/2003-C.E. For this purpose, a certificate from a Chartered Accountant based on the books of accounts for 2014-15 shall suffice. (ix) Excisable goods which were produced on or before 29.02.2016 but lying in stock as on 29.02.2016 shall attract excise duty upon clearance. Manufacturers shall keep a stock declaration of finished goods, goods-in-process and inputs as on 29.02.2016 in their records duly certified by a Chartered Accountant so as to enable the manufacturers to claim CENVAT credit on inputs or inputs contained in goods lying in stock as already provided for in Rule 3(2) of the CENVAT Credit, Rules, 2004, if he so desires. No stock declaration, will, however, be required to be made to the jurisdictional central excise authorities. (x) Full exemption from Central Excise duty will be available to duty-paid goods returned to the manufacturer during a financial year up to an aggregate ceiling not exceeding 10% of the value of clearances for home consumption made in the preceding financial year. The manufacturer would be required to observe the following procedure for this purpose: (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for this purpose shall be done in accordance with the provisions of Para 3A of notification No. 8/2003- CE. For this purpose, a certificate from a Chartered Accountant, based on the books of accounts for 2014-15, shall suffice. 3.2.3 Similarly, for determining the eligibility for availing of the SSI exemption from 2016-17 onwards, a certificate from a Chartered Accountant, based on the books of accounts for 2015-16, shall suffice. 3.2.4 Excisable goods which were produced on or before 29.02.2016 but lying in stock as on 29.02.2016 shall attract excise duty upon clearance. Jewellery manufacturer shall keep a stock declaration of finished goods, goods-in-process and inputs as on 29.02.2016 in their records duly certified by a Chartered Accountant so as to enable the manufacturers to claim CENVAT credit on inputs or inputs contained in goods lying in stock as already provided for in Rule 3(2) of the CENVAT Credit, Rules, 2004, if he so desires. No stock declaration, will, however, be required to be made to the jurisdictional central excise authorities. 3.2.5 Further, the following simplified procedure and guidelines are being issued for strict compliance: i. Registration once appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce. 5. Difficulties faced, if any, in implementation of these new levies which are not covered by the instructions issued in this regard may be communicated to the Board without delay. 6. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which alone have legal force. My team and I have made every possible effort to avoid the occurrence of errors or mistakes in the Budget documents. However, given the scale of changes, inadvertent errors cannot be ruled out. I shall be grateful if the provisions of the Finance Bill and notifications are studied carefully and feedback on issues that may need clarification is provided urgently. 7. It may kindly be ensured that the changes are implemented in a smooth manner without causing any inconvenience to the taxpayers and other stakeholders. All possible efforts may be made to guide the taxpayers by holding interactive sessions/ seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately or to the notice of Sh. G.G. Pai, Director (TRU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing reduced from 30% to Nil. Notification No. 27/2011-Customs, dated 01.03.2011 as amended by notification No. 15/2016-Customs, dated 01.03.2016 [new S. No.24BA refers] 3) Export duty on bauxite (natural), not calcined [2606 00 10] and bauxite (natural) calcined [2606 00 20] is being reduced from 20% to 15%. S.No.24A, 24B of notification No.27/2011-Customs, dated 01.03.2011 as amended by notification No.15/2016-Customs, dated 01.03.2016 refers. Chapter 27: 1) Basic Customs Duty on all goods falling under 2701, 2702 and 2703 is being rationalized at 2.5% BCD. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated 1st March, 2016 [New S.Nos.121B, 121C] refer. 2) Basic Customs Duty on all goods falling under 2704, 2705 and 2706 is being rationalized at 5% BCD. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [New S.No.121D] refers. 3) Basic Customs Duty on all goods falling under 2707 is being rationalized at 2.5% BCD. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-Customs, dated 17th March, 2012 as amended by notification No.16/2016-Customs, dated the 1st March, 2016 [new S.Nos.45AA] refers. Chapter 30 to 38: No change Chapter 39: 1) Basic Customs duty on Polypropylene granules / resins [3902] for the manufacture of capacitor grade plastic films is being reduced from 7.5% to Nil, subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [new S.No. 238A] refers. 2) Basic Customs duty on Super Absorbent Polymer (SAP) [3906 90 90] for manufacture of goods falling under heading 9619 [sanitary towels, tampons, napkins, diapers etc.] is being reduced from 7.5% to 5%, subject to actual user condition. S.No 242 of Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [S.No. 242] refers. Chapter 40: 1) Basic Customs duty on Natural latex rubber made balloons [4016 95 90, 4016 99 90] is being increased from 10% to 20%. Clause 138 (i) of the Finance Bill 2016 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 as amended by notification No.12/2016-Customs, dated the 1st March, 2016 [new S.No. 290A] of refers. Chapter 56 to 69: No change Chapter 70: 1) Exemption from Basic Customs Duty is being withdrawn on solar tempered glass/solar tempered (anti-reflective coated) glass for use in manufacture solar cells/modules/panels. Such solar tempered glass/solar tempered (anti-reflective coated) glass for use in manufacture solar cells/modules/panels will now attract 5% BCD, subject to actual user condition. S. No. 39 of Notification No.24/2005-Customs, dated 1st March, 2005 as amended by notification No. 19/2016-Customs, dated the 1st March, 2016 and Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No. 12/2016-Customs, dated 1st March, 2016 [new S.No. 305A and Condition No. 5] refer. 2) Basic customs duty exemption is being withdrawn on preform of silica [Chapter 70] for use in manufacture of telecommunication grade optical firbre/cables. It will now attract 10% BCD. S.No. 306 of Notification No.12/2012-Customs, dated 17th March, 2012 is omitted by notification No.12/2016- Customs dated 1st March, 2016 refers. Chapter 71: 1) Basic Customs duty on im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 422H of notification 12/2012- Customs as inserted by notification No. 12/2016 refers 3) CVD exemption on specified machinery required for construction of roads is being withdrawn. S.No.368 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2016-Customs, dated the 1st March 2016 refers. 2) Basic Customs duty on industrial solar water heater [8419 19 20] is being increased from 7.5% to 10%. Clause 138 (i) of the Finance Bill 2016 refers. Further, Basic Customs duty of 7.5% is being retained on other water heaters [with other than solar heating source] falling under 8419 19 20. 4) Basic customs duty is being exempted on specified raw materials for use in manufacture of Micro fuses, Sub-miniature fuses, Resettable fuses, and Thermal fuses. S .No. 93 & 190 of Notification No.25/99-Customs, dated 28th February, 1999 as amended by notification No. 17/2016- Customs dated 1st March, 2016 refers. 5) Further, Basic customs duty is also being exempted on specified capital goods for use in manufacture of Micro fuses, Sub-miniature fuses, Resettable fuses, and Thermal fuses. S.No. 64 of Notification No.25/2002-Customs, dated 1st March, 2002 as ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs dated 1st March, 2016 [new S.No.372B] refers. Notification No. 21/2012-Customs dated 17th March, 2012 as amended by notification No. 16/2016- Customs dated 1st March, 2016 [new S.No. 82B] refers. 10) Basic Customs Duty and CVD exemptions are being withdrawn on charger/Adapter, Battery and Wired Headsets/Speakers for use in manufacture of mobile handsets including cellular phone. S.No. 431 of Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No. 12/2016-Customs dated 1st March, 2016 refers and S.No. 39 of Notification No.24/2005-Customs, dated 1st March, 2005 as amended by notification No. 19/2016-Customs dated 1st March, 2016 refers. 11) Further, SAD exemption on charger/Adapter, Battery and Wired Headsets/Speakers for use in manufacture of mobile handsets including cellular phone is being withdrawn. S.No. 14D of Notification No.21/2012-Customs, dated 17th March, 2012 as amended by notification No. 16/2016-Customs dated 1st March, 2016 refers. 12) Further, Basic Customs Duty and Excise Duty [and thus CVD] are being exempted on inputs and parts for manufacture of charger/adapter, battery and wired headsets/speakers of mobile handsets incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... battery meter/VC meters / Tape counters, Tone arms and Electron guns. Items (4), (5), (7), (9), (10), (11) and (17) of List 21 of Notification No.12/2012-Customs, dated 17th March, 2012 as omitted vide notification No. 12/2016-Customs, dated 1st March, 2016 refers 16) Basic Customs Duty exemption on LCD (Liquid Crystal Display), LED (Light Emitting Diode) or OLED (Organic LED) panels is being restricted to imports for manufacture of TVs, subjected to actual user condition. S.No. 432 of Notification No.12/2012-Customs, dated 17th March, 2012 as amended vide notification No. 12/2016-Customs, dated 1st March, 2016 refers. 17) Basic Customs Duty is being exempted on Neodymium Magnet (before Magnetization) [8505 11 90] and Magnet Resin (Strontium Ferrite compound/before formed, before magnetization) [3824 90 32] for use in manufacture of BLDC motors, subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No. 12/2016- Customs dated 1st March, 2016 [new S.No. 230B] refers. 18) Basic Customs Duty exemption on E-Readers [8543] is being withdrawn. They will now attract BCD of 7.5%. S.No.433A of notification No.12/2012-Customs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 12/2016-Customs, dated 1st March, 2016 refers. 4) The entry of 6% appearing in column 5 of Sl. No. 439 and 440 of notification No. 12/2012-Customs is being omitted. Notification No. 12/2012-Customs as amended by notification No. 12/2016-Customs, dated 1st March, 2016 refers. 6% Concessional CVD on imports will, however, continue by virtue of 6% concessional excise duty under S. No. 296 and 297 of the Notification No. 12/2012-Central Excise dated 17.03.2012. Chapter 88: 1) Basic Customs duty on tools and tool kits for maintenance, repair, and overhauling of aircraft are being exempted. Further, the procedure for availment of the customs duties exemption under S.No.448 of notification No.12/2012-Customs, dated 17.03.2012 is being simplified. Moreover, the restriction of one year for utilization of duty free parts [as also the testing equipment, tools and tool kits] for maintenance, repair and overhaul of aircraft is being done away with. S.No.448 and Condition No.73 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No. 12/2016-Customs, dated 1st March, 2016 refers. 2) S.No.448 of notification No.12/2012-Customs, dated 17.03.2012 prescribes Nil C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 01.03.2016. Chapter 90 1) Tariff rate of BCD is being increased from 7.5% to 10% on 5 specified tariff lines falling in Chapter 90. Clause 138 (i) of the Finance Bill refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. However, the effective rates for 5 tariff lines are being maintained at 7.5%. Notification No.12/2012- Customs as amended by notification No. 12/2016 [new S. No. 422I] refers. Chapter 91 to 94: No change Chapter 95: 1) Basic Customs duty on natural latex rubber made balloons [9503 00 90, 9505 10 00 & 9505 90 90] is being increased from 10% to 20%. Clause 138 (i) of the Finance Bill 2016 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. Further, Basic Customs duty of 10% is being retained for all goods other than natural rubber latex made balloons falling under tariff lines 9503 00 90, 9505 10 00 & 9505 90 90. Chapter 96 to 97: No change Chapter 98: 1) Concessional 5% BCD is being extended to „cold chain including pre-cooling unit, packhouses, sorting and grading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist 13 and 14 are being omitted. 4) In case of power generation project based on municipal and urban waste, valid agreement between producer of power with urban local body for processing of municipal solid waste for not less than ten years from the date of commissioning of project is being prescribed for availing customs and excise duty concessions as an alternative to the existing condition of "production of valid power purchase agreement between the importer/producer of power and the purchaser, for the sale and purchase of electricity generated using non-conventional materials". Notification No.81/2005-Customs, dated 8th September, 2005 as amended by notification No. 22/2016-Customs, dated 1st March, 2016 refers. ***** ANNEX II EXCISE Chapter 1 to 20: No change. Chapter 21: 1) Basic Excise Duty is being increased on pan masala [2106 90 20] from 16% to 19%. S.No.35 of notification No.12/2012-Central Excise dated 17th March, 2012 as amended by notification No.12/2016-Central Excise dated 01.03.2016 refers. Accordingly, the duty leviable under the compounded levy scheme has also been modified. Notification No. 30/2008 - Central Excise (N.T.) dated 01.07.2008 as amended by not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igher 2402 90 90 Others of tobacco substitutes 12.5% or ₹ 3375 per thousand, whichever is higher 12.5% or ₹ 3755 per thousand, whichever is higher 3) The tariff rate of Basic Excise Duty on Paper rolled biris [whether handmade or machine made] and other biris [other than handmade biris] [2403 19 29] is being increased from ₹ 30 per thousand to ₹ 80 per thousand. However, there is no change in effective basic excise duty rate on these goods which is presently ₹ 21 per thousand. 4) Basic Excise Duty is being increased on unmanufactured tobacco, and jarda scented tobacco, gutkha and chewing tobacco. Clause 143 (i) of the Finance Bill, 2016 refers. These changes will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. There is no change in NCCD and Health Cess rates. The changes in basic excise duty rates are summarized below. Accordingly, the duty leviable under the compounded levy scheme has also been modified. Further, the speed slabs and the deemed production and duty payable per month on chewing tobacco without lime tube / lime pouches and jarda scented tobacco are being aligned. Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No.1/2015-Clean Energy Cess, dated 1st March, 2015 is being rescinded, vide notification No. 1/2016-Clean Energy Cess, dated 1st March, 2016 and the rate of ₹ 400 per tonne will operate through the Schedule. Further, the Clean Energy Cess is being renamed as Clean Environment Cess. This change will come into force with effect from the date of enactment of the Finance Bill, 2016. 4) Clean Energy Cess on all goods produced or extracted as per traditional and customary rights enjoyed by local tribals without any license or lease in the State of Nagaland is being fully exempted. Notification No. 5/2010-Clean energy Cess, dated 22.06.2010 as amended by notification No. 2/2016-Clean Energy Cess dated 1st March, 2016 refers. Chapter 28, 29 or 38: 1) Basic Excise Duty on micronutrients falling under Chapter 28, 29 or 38, which are covered under Sr. No. 1(f) of Schedule 1 Part (A) of the Fertilizer Control Order, 1985 and are manufactured by the manufacturers which are registered under FCO, 1985, is being reduced from 12.5% to 6%. Notification No.12/2012- Central Excise, dated 17th March, 2012 as amended by notification No. 12/2016- Central Excise dated 1st March, 2016 [Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 12/2016-Central Excise, dated the 1st March, 2016 [new S. No 152A] refers. Chapter 41 to 53: No change. Chapter 54 and 55: 1) Basic excise duty on PSF / PFY manufactured from plastic scrap or plastic waste including waste PET bottles is being changed from „2% without CENVAT credit or 6% with CENVAT credit‟ to „2% without CENVAT credit or 12.5% with CENVAT credit‟. S. No. 172A of notification No.12/2012- Central Excise, dated 17th March, 2012 as omitted by notification No. 12/2016-Central Excise dated 1st March, 2016 refers. The rate of 12.5% will now operate through tariff. Chapter 56 to 60: No change Chapter 61 to 63: 1) Basic Excise Duty of „2% (without CENVAT credit) or 12.5% (with CENVAT credit)‟ is being imposed on readymade garments and made up articles of textiles falling under Chapters 61, 62 and 63 (heading Nos. 6301 to 6308) of the Central Excise Tariff, except those falling under 6309 00 00 and 6310, of retail sale price (RSP) of ₹ 1000 and above when they bear or are sold under a brand name. This optional levy would apply to such readymade garments and made up articles of textiles regardless of the composition of the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an eligibility limit of ₹ 12 crore in the preceding financial year. For the month of March, 2016, the SSI exemption for such articles of jewellery is being restricted to ₹ 50 lakh. Notification No. 8/2003-Central Excise, dated 1st March, 2003 as amended by notification No. 8/2016-Central Excise dated 1st March, 2016 refers. 3) Optional centralized registration is being extended to manufacturers of Articles of Jewellery [excluding articles of silver jewellery, other than studded with diamonds, ruby, emerald or sapphire]. Notification No. 5/2016- Central Excise (N.T.) dated 1st March, 2016 refers. 4) Requirement of post registration physical verification for manufacturers of Articles of Jewellery [excluding articles of silver jewellery, other than studded with diamonds, ruby, emerald or sapphire] is being done away with. Notification No. 35/2001-Central Excise (N.T.), dated 26th June, 2001 is being amended suitably by notification No. 6/2016- Central Excise (N.T.) dated 1st March, 2016 refers. 5) Basic Excise duty on Gold Bars manufactured from gold ore or concentrate; gold dore bar and silver dore bar is being increased from 9% to 9.5%. S. No. 189 of Notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 12.5% with CENVAT credit‟. S. No. 53 of notification No. 2/2011-Central Excise dated 01.03.2011 as amended by notification No. 10/2016-Central Excise, dated 1st March, 2016 refers. Chapter 77 to 83: No change. Chapter 84 and 85: 1) Basic Excise Duty on 5 specified parts required for the manufacture of centrifugal pump is being reduced from 12.5% to 6%, subject to actual user condition. Notification No. 12/2012-Central Excise, dated 17th March, 2012 as amended by Notification No. 12/2016-Central Excise dated 1st March, 2016 [New S. No. 235A] refers. 2) Accessories of goods falling under tariff item 8426 41 00, heading 8427, 8429 and sub-heading 8430 10 are being included for the purposes of RSP based assessment of excise duty. S. No. 109 of Notification No.49/2008-Central Excise (N.T.), dated 24th December, 2008 as amended vide notification No. 12/2016-Central Excise (N.T.), dated 1st March, 2016 and Clause 142 (i) of the Finance Bill, 2016 refer. The Third Schedule to the Central Excise Act, 1944 is also being amended so as to include therein these accessories. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this change will come int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -top boxes for gaining access to internet [tariff item 8517 69 60] (iv) Reception apparatus for television but not designed to incorporate a video display[tariff item 8528 71 00] (v) Digital Video Recorder (DVR)/Network Video Recorder (NVR) [tariff item 8521 90 90] (vi) CCTV Camera/IP Camera [tariff item 8525 80 20] (vii) Lithium-ion batteries, other than those for mobile handsets including cellular phones [tariff item 8507 60 00] Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended by notification No.12/2016-Central Excise dated 1st March, 2016 [new S.Nos.262A, 263J, 263L, 263N, 263P, 263R, 263T] refer. 8) Further, excise duty is being exempted on parts, components and accessories for use in manufacture of Routers, broadband Modems, Set-top boxes for gaining access to internet, set top boxes for TV, digital video recorder (DVR) / network video recorder (NVR), CCTV camera / IP camera, lithium ion battery [other than those for mobile handsets]. Further, Excise Duty is also being exempted on sub-parts for use in manufacture of parts, components and accessories of the aforesaid Consumer Premise Equipments. These exemptions are subject to actual user conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions); b) 1% on Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1200cc; c) 2.5% on Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc; d) 4% on all categories of motor vehicles other than those listed at (a), (b) and (c) above; Further, the Cenvat Credit Rules are being amended to provide that CENVAT credit cannot be utilised for payment of this Infrastructure Cess. Further, no credit of this Cess would be available under the Cenvat Credit Rules, 2004. Notification No.13/2016-Central Excise (N.T.) dated 01.03.2016 refers. 4) Accessories of certain vehicles falling under Chapter 87 are being included for RSP based assessment. S. No. 108 of Notification No.49/2008-Central Excise (N.T.), dated 24th December, 2008 as amended vide notification No.16/2016-Central Excise (N.T.), dated 1st March, 2016 refers. Third Schedule to the Central Excise Act, 1944 is also being amended so as to include therein such accessories. Clause 142(i) of the Finance Bill, 2016 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this change will come into force with immed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parts and sub-parts of rotor blades for wind operated electricity generators, is being reduced from 12.5% to 6%, subject to actual user condition. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2016-Central Excise dated 1st March, 2016 [New S. No. 327A, List 9A] refers. 5) Excise duty on improved cook stoves including smokeless chulhas for burning wood, agrowaste, cowdung, briquettes, and coal in being exempted unconditionally. List-8 of Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2016-Central Excise dated 1st March, 2016 [new item 22, List-8] refers. As a result, parts of such cook stoves will also be exempt from excise duty subject to actual user condition. Consequently, notification No 62/91-CE dated 25.07.1991 is rescinded by notification No 13/2016-CE dated 01.03.2016. 6) The excise duty exemption under the existing area based exemptions for production of gold and silver from gold dore, silver dore or any other raw material is being prospectively withdrawn. Thus, a new industrial unit engaged in production of refined gold from gold dore, silver dore or any other raw mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions have been received to make a provision in notification No.102/2007-Customs dated 14.09.2007, which provides for refund of SAD in cases where VAT is paid on the subsequent sales of imported goods. In this context, it is clarified that since the imports under notification No.51/96-Customs, dated 23.07.1996 is ab initio exempt from SAD, there is no requirement to make a provision for refund of SAD in notification No.102/2007-Customs dated 14.09.2007. 2) Doubts have been raised as to whether any Power Project listed for exemption from BCD and CVD [under list 32A of S.No. 507 of notification No.12/2012-Customs] and awarded under International Competitive Bidding (ICB) will be eligible for excise duty exemption under S.No. 336 of notification No. 12/2012-Central Excise [which is for goods supplied against ICB procedure] even if such Power Project is separately listed in List 10 [S.No. 337] or List 11 [S.No. 338] of notification No. 12/2012-Central Excise. In this regard, it is hereby clarified that a project which is listed in List 32A of S. No. 507 of Notification No. 12/2012-Customs, [which exempts goods for such project from BCD and CVD], as a corollary, will also be exempted fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 12/2012-Customs as amended by Notification No. 12/2016-Customs refers] 5) Representations have been received regarding the eligibility of aircraft engines and parts thereof, for customs duty exemption under S.No. 448 and 456 of notification No.12/2012-Customs, dated 17th March, 2012. It is, hereby, clarified that aircraft engines and parts thereof are eligible for customs duty exemption under the aforementioned S.Nos. of notification No. 12/2012-Customs dated 17.03.2012, subject to fulfillment of conditions mentioned therein. EXCISE 1) Notification No.10/97-CE dated 01.03.1997 grants exemption from excise duty to scientific and technical instruments, apparatus, equipment (including computers) and accessories, parts and consumables, supplied to specified institutions, subject to certification by the Head of the Research Institution that the said goods are essential for research purposes and will be used for the stated purpose only, and will not be transferred or sold by the institution for a period of 5 years from the date of installation, and such institutions are registered with Department of Scientific and Industrial Research (DSIR). Representations have been receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty exemption from such expanded capacity with effect from the date commencement of commercial production for a further period of 10 years. It is clarified that in absence of a provision to the contrary, the area based excise duty exemption presently available to the North Eastern States including Sikkim vide notification No.20/2007-CE dated 25.04.2007 [for which the sunset clause is 31.03.2017] will be available to an existing unit on second substantial expansion as well, provided that the concerned unit commences commercial production from such expanded capacity not later than 31.03.2017. 4) Notification No.108/95-CE, dated 28th August, 1995 provides full exemption from excise duty to goods supplied to the projects financed by the UN or an international organization and approved by the Government of India subject to certification by the authorities concerned that the said goods are required for the execution of the said project. A doubt has been raised as to whether the benefit of excise duty exemption is intended to be restricted to direct supplies by the contractor to the project. In this regard, it is clarified that the exemption from excise duty, under notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from one year to two years in cases not involving fraud, suppression of facts, willful mis-statement, etc. b) provide for deferred payment of customs duties for importers and exporters to certain class of importers and exporters. 7. Section 53 is being amended so as to enable the Board to frame regulations for allowing transit of certain goods and conveyance without payment of duty. 8. Sections 57 and 58 are being substituted to provide for licensing by the Principal Commissioner or Commissioner, in place of Deputy/Assistant Commissioner, subject to such conditions as may be prescribed. 9. New section 58A is being inserted to provide for a new class of warehouses which require continued physical control and will be licensed for storing goods, as may be specified. 10. New section 58B is being inserted so as to regulate the process of cancellation of licences which is a necessary concomitant of licensing. 11. The existing section 59 governing warehousing bonds submitted by importers availing duty deferred warehousing is being substituted so as to fix the bond amount at thrice the duty involved and to furnish security as prescribed. 12. The existing section 60 is being su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to "section 8B" so as to clearly provide that exemption from safeguard duty under section 8B of the Customs Tariff Act, 1975 was/is available under these notifications on imports under Advance Licence and Duty Free Import Authorization Schemes. AMENDMENT IN THE CUSTOMS TARIFF ACT, 1975 S.No. Amendment 1. Section 8C [Power of Central Government to impose transitional product specific safeguard duty on imports from People‟s Republic of China] is being omitted. AMENDMENT IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975 S.No. Amendment A. Amendments not affecting rates of duty 1. Editorial changes in the Harmonized System of Nomenclature (HSN) in certain chapters are being incorporated in the First Schedules, to be effective from 01.01.2017. 2. To: 1) Amend supplementary notes (e) and (f) Chapter 27 so as to change the reference: a) from IS:1460:2000 to IS:1460:2005 for high speed diesel (HSD) and b) from IS:1460 to IS: 15770:2008 for light diesel oil (LDO); 2) Substitute Tariff line 5901 39 10 with description "Warp pile fabrics, uncut" in place of tariff line 5801 37 11 [with description Warp pile fabrics „epingle‟ uncut velvet] and 5801 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changes in the Harmonized System of Nomenclature (HSN) in certain chapters are being incorporated in the First and Second Schedules, to be effective from 01.01.2017. 2. To: a) Amend supplementary notes (e) and (f) Chapter 27 so as to change the reference: i. from IS:1460:2000 to IS:1460:2005 for high speed diesel (HSD) and ii. from IS:1460 to IS: 15770:2008 for light diesel oil (LDO) b) Substitute Tariff line 5901 39 10 with description "Warp pile fabrics, uncut" in place of tariff line 5801 37 11 [with description Warp pile fabrics „epingle‟ uncut velvet] and 5801 37 19 [with description Warp pile fabrics „epingle‟ uncut other]; c) Prescribe separate tariff lines for laboratory created or laboratory grown or manmade or cultured or synthetic diamonds; d) Delete Tariff line 8525 50 50, relating to Wireless microphone. B. Amendments involving change in the rate of duty From To Aerated Beverages 1. Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured 18% 21% Tobacco and Tobacco Products 2. Cigar and cheroots 12.5% or ₹ 3375 per thousand, whichever is higher 12.5% or ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r tonne to ₹ 400 per tonne [Clause 232] 4) Infrastructure Cess is being levied on motor vehicles, of heading 8703, as under: b) Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1200cc - 1% c) Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc - 2.5% d) Other higher engine capacity motor vehicles and SUVs and bigger sedans - 4%. Three wheeled vehicles, Electrically operated vehicles, Hybrid vehicles, Hydrogen vehicles based on fuel cell technology, Motor vehicles which after clearance have been registered for use solely as taxi, Cars for physically handicapped persons and Motor vehicles cleared as ambulances or registered for use solely as ambulance will be exempt from this Cess. No credit of this Cess will be available, and credit of no other duty can be utilized for payment of this Infrastructure Cess. [Clause 159] The increase in duty rates under 2), 3) and imposition of Cess at 4) above will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. RULES AND REGULATIONS UNDER THE CUSTOMS ACT, 1962 1) The existing Baggage R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this facility to transfer input services credit to outsourced manufacturers, under certain circumstances. The amendments in these Rules will also enable manufacturers with multiple manufacturing units to maintain a common warehouse for inputs and distribute inputs with credits to the individual manufacturing units. 3) Instructions are being issued to Chief Commissioners of Central Excise to file application to Courts to withdraw prosecution in cases involving duty of less than rupees five lakh and pending for more than fifteen years. 4) The existing Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2001 are being substituted with the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2016, so as to simplify the rules, including allowing duty exemptions to importer/manufacturer based on self-declaration instead of obtaining permissions from the Central Excise authorities. AMENDMENTS TO OTHER ACTS S.No. Amendment 1. THE FINANCE ACT, 2001 (i) The Seventh Schedule which provides for levy on NCCD of excise on specified goods is being amended so a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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